IRS chief Frank Bisignano spied on JPMorgan colleagues in 2012

Bisignano, who now runs two agencies holding financial data on every US taxpayer, allegedly used his authority over JPMorgan's security department around 2012 to access rival executives' emails and confidential regulatory documents, the Journal reported Monday.

"Bisignano never directed anyone to look through any employee's or executive's communications or engaged in any form of surveillance," Courtney Forrest, his attorney, said in a statement.

The alleged surveillance targeted Charlie Scharf, then JPMorgan's head of consumer banking and now Wells Fargo's chief executive, with one executive saying he planted a code phrase in his email that Bisignano later repeated back to him, the people said. Bisignano also accessed a draft complaint from the Federal Energy Regulatory Commission about a questioned derivatives trade — a document seen by only a few legal department members — and directed staff to track employee keystrokes, according to the report. After Bisignano left the bank in 2013, JPMorgan's legal department found digital traces of the activity and tightened access controls, requiring senior legal approval to view employee communications.

The allegations raise questions about the judgment of an official now responsible for enforcing US tax law and administering Social Security benefits for more than 70 million Americans. Bisignano was confirmed as Social Security Administration chief last year and later appointed CEO of the IRS, where he oversees an agency that stores tax returns and financial data for every US taxpayer and business.

Forrest also denied that Bisignano accessed the FERC complaint, that an executive planted a code word to catch him reading email, and that Jamie Dimon, JPMorgan's chief executive, asked him to leave the bank. She said Bisignano voluntarily left to become chief executive of First Data.

Dimon's shifting trust

For years, Dimon dismissed complaints about Bisignano's conduct as routine conflicts between ambitious executives, the people said. But by late 2012, after continued clashes with colleagues and a failure to demonstrate willingness to change, Dimon lost trust in him and told Bisignano he would support him finding a job elsewhere, according to the report. At a 2013 wedding of a former JPMorgan executive, Dimon asked why others had waited so long to tell him their concerns, people who heard him said.

The alleged surveillance came to light only after Bisignano's departure, when forensic investigators found digital footprints showing his staff had accessed sensitive corporate records and employee communications without a clear business purpose, the people said. The bank didn't prepare a report documenting any investigation into the alleged misconduct, and when Bisignano left, JPMorgan didn't grant him his unvested shares.

From Wall Street to Washington

President Donald Trump picked Bisignano to lead the Social Security Administration, and his responsibilities expanded last year when he was appointed CEO of the IRS. At both agencies, he faces the challenge of modernizing technology systems more than 20 years old. At the IRS, which has rotated through a half-dozen leaders during the Trump administration, Bisignano is also tasked with enforcing tax law with a smaller staff.

In May, Bisignano agreed to settle a lawsuit Trump brought against the IRS for the 2019 leak of his tax returns, including an unprecedented agreement that the government would never review or audit previous tax filings by Trump, his sons or the Trump Organization. On July 13, a federal judge harshly criticized the agreement, saying the president and his family acted in bad faith in bringing the $10 billion lawsuit and that the acquiescence to it by Bisignano and others was "wholly incompatible" with their duties to enforce the law.

A White House spokeswoman said Bisignano "is a trusted and talented member of the President's team who is doing an incredible job." Treasury Secretary Scott Bessent said Bisignano's proven executive leadership has improved services at the IRS and eliminated waste.

This article is for informational purposes only and does not constitute investment advice.